“Limitation fund” is a legal concept primarily intended for securing the claims of injured persons in the event of a loss caused by the shipowner. The Convention on Limitation of Liability for Maritime Claims (London, 1976) leaves it to every State Party to decide whether the constitution of such a fund will be a prerequisite for the limitation of liability. The Croatian Maritime Code (Official Gazette, No. 181/04, 76/07, 146/08 and 61/11) provides that the constitution of a limitation fund is mandatory (article 395, paragraph). The aim of this article is to explore the validity of such a provision. At the beginning of the paper, the main characteristics of the concept are identified and its historical development explained. The main part of the paper consists of an analysis of the current situation in both the international and the domestic maritime law, with special emphasis on the legal effects of the fund and the relationship between the specific and general limitation of liability (new Rotterdam Rules and the London Conventions of 1976). The final part deals first with the legal status of the fund in bankruptcy proceedings, then with the relationship between the fund and the marine liability insurance. Finally, the authors emphasize the problems of implementation and state the reasons for the absence of any further obligation to constitute the fund.